Citigroup is a Buy on This Ascending Triangle Breakout

I have been following C now since August 7th in search for a breakout of an apparent ascending triangle pattern. Recently the requirements were met for me to take a long position. C broke out over its resistance around 4.25-4.50, by gapping up on above average volume. It then retested the old resistance and appeared to now use it as a support.

The characteristics of an ascending triangle are that once a break-out has occurred, you can use the longest price range of the triangle as a projection point upwards. In this case the longest price range was from around 4.48 high to a 2.25 low. The difference there being 2.23. So I will be looking for at least a $2 move if C does not fall under it's new support of $4.50.

Along with the price pattern, there is also a big benefit of C making solid closes above $5. There are a few reasons this $5 mark is important:

1. Mutual fund managers will be allowed to buy Citigroup again. Many of the funds charters restrict their managers from buying or holding stocks under $5.00
2. Many brokerage houses consider any stock under $5 speculative and discourage trading them. A lot of the time making their clients sign more paper work in order to do so.
3. A "penny stock," according to SEC interpretation, is an equity trading for less than $5 a share that is not traded on the listed markets of the NYSE, AMEX, or NASDAQ. This perception of riskiness in sub-$5 dollar stocks outside the major exchanges has definitely influenced the perception off all sub-$5 stocks, even those highly liquid and more transparent exchange traded stocks.

With that I have bought a few $5.00 Septemper Calls, and would consider buying more on any above average volume close over $5. And my Exit strategy is to sell if C closes below $4.50.